The Adjudicating Authority cannot direct a forensic audit and engage which will effect object of IBC 2016

Last updated: 03 January 2023

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The National Company Law Appellate Tribunal (NCLAT) has ruled that an Adjudicating Authority cannot order a forensic audit before admitting an insolvency case. Such a lengthy pre-admission process can undermine the core objectives of the Insolvency and Bankruptcy Code (IBC) 2016, which prioritises timely resolution. The Authority must base its decision on evidence provided, and can return incomplete applications for correction, rather than initiating extensive investigations.

Court :
National Company Law Appellate Tribunal (NCLAT)

Brief :
The Adjudicating Authority cannot direct a forensic audit and engage in a long-drawn pre-admission exercise which will have the effect of defeating the object of the �I&B Code,2016.

Citation :
Company Appeal (AT) (Insolvency) No. 1304 of 2019

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Judgement posted by

FCS Deepak Pratap Singh

Associate Vice President - Secretarial & Compliance (SBI General Insurance Co. Ltd.)

Dear Friends, MyselfFCSDeepak P. Singh ( B.Sc.. LLB, FCS. FIII, CIAFP, CRMP, ID) , A Fellow Member of ICSI, Law Graduate ,Fellow Member of Insurance Institute of India, Certified Independent Director ,Certified Insurance Anti Fraud Professional , Certified Risk Governance Professional ( ICSI-III) and cleared Limited I ... Read more

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